ELECTRONIC-VALUE ADDED TAX (E-INVOICING)
The Government of Ghana concurrent with the Ghana Revenue Authority (GRA) digitalization agenda announced in April 2022 the introduction of Electronic Invoicing of Value Added Tax (VAT) transactions. Consequently, the Government in its mid-year budget review on 25 July 2022 further entrenched this position and gave a timeline for the implementation of the electronic invoicing to 1 October 2022. Parliament gave effect to this policy by the promulgation of Act 1082 which specifically amended Section 41 (2) of the Value Added Tax Act, 2013 (Act 870) as amended to provide for the electronic invoicing of Value Added Tax through a Certified Invoicing System.
The system was officially implemented by the Ghana Revenue Authority on 1 October 2022.
Electronic Invoicing or E-Invoicing
This is a system that transforms manual invoice issuance process into an electronic process and allows for such invoices, including debit and credit notes to be exchanged electronically between buyers and sellers. This enables the Ghana Revenue Authority (GRA) to validate and authenticate the issuance of invoices by taxpayers in real time.
The electronic invoicing is to curtail the forgery of invoices by taxpayers, carding of these invoices, overstatement of input VAT, understatement of output VAT, huge cost of tax audit by the Revenue Authority and lack of data for effective tax compliance.
Benefits of Electronic invoicing
The electronic invoicing, amongst others, is intended to achieve the following benefits to both the taxpayer and the Revenue Authority:
Architecture for electronic invoicing
The design for electronic invoicing involves the following:
Taxpayers who already have their own software in place will undergo system integration. This includes integration with enterprise resource planning software (ERP), point of sales (POS), accounting software, cash register and gaming or e-commerce.
In pursuit of the Revenue Authority to implement the electronic invoicing for all taxpayers who qualify for registration for VAT, the Revenue Authority has rolled a roadmap which is to ensure that by 2024, all taxpayers would be migrated onto the system and therefore fade the manual invoicing from the system.
In achieving this, Large Taxpayers are required to be migrated onto the system before the close of the year 2022. Medium Taxpayers are also required to be migrated on to the system by 2023 and Small and Other Taxpayers would be migrated onto the system by close of year 2024. Though this is the intended roadmap, taxpayers in any of these categories may voluntarily apply for them to be migrated onto the system before the end of 2024.
The Authority is also engaging the various stakeholders to sensitize them in the implementation of this new Certified Invoicing System.
Application for installations
Offences under the Act
Section 41(11) of Act 1082 prescribes the following as offences under the Certified Invoicing System, where a person:
A person charged with any of these offences, in addition to penalties for non-filing and payment of the tax, is liable to pay a penalty of an amount of not more than five hundred (500) currency points or three times the amount of tax involved, whichever is higher.
ELECTRONIC TAX CLEARANCE CERTIFICATE – E-TCC
The electronic tax clearance certificate has been introduced to the taxpayer’s portal which makes it easy for the issuance of tax clearance certificate (TCC) and with minimal human intervention. The introduction of the electronic tax clearance certificate is to comply with Section 26 of the Revenue Administration Act, 2016 (Act 915) as amended.
Benefits of the electronic tax clearance certificate
This, among others, is to achieve the following:
Requirements for getting a tax clearance certificates (TCCs)
Where these two conditions are satisfied, the taxpayer’s portal would indicate “green” but where there is default in the filing or payment of taxes, the taxpayer’s portal would indicate “red”. A “green” depicted on the taxpayer’s portal would make the application process easier and even for subsequent future applications. Where the taxpayer’s portal indicates “red”, then the taxpayer has to file and pay those taxes indicating non-compliance and where any of these situations persist, he may contact the tax office for resolution.
Application of electronic tax clearance certificate using the taxpayer’s portal
Security features of the Electronic Tax Clearance Certificate
The electronic tax clearance certificates come with added security which the taxpayer can authenticate through scanning of the QR Code, checking the certificate number using a USSD and searching for it from the taxpayer’s portal under the Tax Clearance Certificate (TCC) button.
CONTACT OUR TEAM FOR MORE INFORMATION:
+233 24 467 7184 / +233 30 222 3810
Senior Tax Consultant
+233 24 124 3426